Anlon Healthcare Limited – A Pharma Intermediates Player

28 Aug 2025 , 11:44 AM

Anlon Healthcare Limited is a Gujarat based pharmaceutical API and intermediates manufacturer with a growing manufacturing presence. While the industry faces heavy competition from Chinese players, increasing domestic and international demand for high-quality APIs, rising exports, and supportive regulatory standards are driving growth.

Its IPO is aimed at strengthening its balance sheet, funding capex and meeting its working capital needs.

Offer Details of the IPO

• Total Size of the Offer: Up to INR 1210.3 million
• Fresh Issue: Up to INR 1210.3 million

Price Band: INR 86 to INR 91 per Equity Share

Book Running Lead Manager (BRLM):

• Interactive Financial Services Limited

Objectives of the IPO

• Full or part repayment of debt: INR 50 million
• Funding Capital expenditure for the expansion of its manufacturing facility: INR 307.2 million
• Funding Working capital requirements: INR 431.5 million

Indian Pharmaceutical Industry – Overview

The Indian pharmaceutical industry is a significant and rapidly growing sector that plays a crucial role in the country’s economy and healthcare system. The industry is involved in the research, development, production, and distribution of pharmaceutical products, including generic medicines, branded formulations, and active pharmaceutical ingredients (APIs). The end customers of the industry include patients, hospitals, and healthcare providers, both domestically and internationally. The products and services offered by the industry include prescription and over-the-counter (OTC) medicines, vaccines, diagnostic kits, and contract research and manufacturing services.

The Indian pharmaceutical industry can be broadly segmented into three key categories: Formulation, API, and Contract Research and Manufacturing (CRAM) segments.

• Formulation Segment: This segment involves the production of finished pharmaceutical products, such as tablets, capsules, and injectables, using APIs and other ingredients. It is further divided into generic formulations, which are copies of patented medicines produced after patent expiry, and branded formulations, which are proprietary medicines developed and marketed by pharmaceutical companies.
• API Segment: This segment involves the production of active pharmaceutical ingredients (APIs), which are the essential components used in pharmaceutical products. It is further divided into synthetic APIs, produced through chemical synthesis, and natural APIs, derived from biological sources such as plants and animals.
• CRAM Segment: This segment involves the provision of research and development (R&D) services, as well as contract manufacturing services, to pharmaceutical companies. It enables companies to outsource R&D and manufacturing activities to specialized firms, reducing costs and improving operational efficiency.

Industry Size and Growth Trends

The Indian pharmaceutical industry has witnessed significant growth in recent years, driven by increasing demand for affordable and high-quality medicines, growing exports, and supportive government initiatives. As of FY 2025, the industry is estimated to be worth approximately INR 4,741 billion, with a projected growth rate of 10% per annum, expected to reach INR 7,327 billion by FY 2030.

Segment-wise Growth Trends

The growth of the pharmaceutical industry can be segmented into two main categories: formulations and active pharmaceutical ingredients (APIs)

• Formulations: This segment accounts for the largest share of the industry’s revenue, driven by rising demand for generic medicines and branded formulations.
• APIs: The API segment is expected to witness higher growth rates, fueled by increasing demand for high-quality active pharmaceutical ingredients from both domestic and international markets.

The growth of the Indian pharmaceutical industry can be attributed to several key drivers:

Increasing Demand for Affordable Medicines: Government initiatives to improve access to affordable healthcare have increased demand for generic medicines, driving growth in the formulations segment.

Growing Exports: Rising global demand for high-quality APIs and pharmaceutical products has led to steady growth in exports.

Government Initiatives: Programs such as the Production Linked Incentive (PLI) scheme and promotion of bulk drug parks support the expansion of the industry.

Increasing Investment in R&D: Pharmaceutical companies are investing in research and development to develop new and innovative products, boosting growth and competitiveness.

Anlon Healthcare Limited: A Pharma Intermediates Player

Anlon Healthcare Limited is an Indian pharmaceutical company specializing in the manufacturing of pharmaceutical intermediates and active pharmaceutical ingredients (APIs). The company was incorporated in 2013 as Anlon Ventures Private Limited and later renamed Anlon Healthcare Private Limited in 2015.

The company’s founders, Punitkumar R. Rasadia and Meet Atulkumar Vachhani, have been associated with the company since its inception and have played a pivotal role in shaping its business strategies and operations.

APIs and Finished Dosage Formulations constitute the bulk of its revenue (93% in FY25). In addition, it manufactures nutraceuticals. The following is a detailed description of its products:

Table: Key Products

Pharma Industry Segment	Applications
Active Pharmaceutical Ingredients	Pharma Intermediates serve as a key starting material or as an advance intermediate for the manufacturing of APIs.
Finished Dosage Formulations	APIs serve as a raw material for preparation of various type of FDF like tablet, capsules, ointment, syrup, etc.
Nutraceuticals Products	APIs serve as a raw material for preparation of dietary supplements.
Personal Care Products	APIs serve as a raw material for preparation of personal care products, particularly piroctone olamine which is used in anti- dandruff products.
Veterinary (Animal Health)	APIs serve as a raw material for preparation of various formulation for animal health medicine

Source: RHP

In addition to domestic market, Anlon Healthcare exports its products to several international markets, including Italy, Germany, South Korea, China, and Brazil.

Table: Revenue by Geography (in INR Lakhs)

Geography	Fiscal 2025		Fiscal 2024		Fiscal2023
	Amount	% of Revenue	Amount	% of Revenue	Amount	% of Revenue
India (domestic sales)	11,639	96.76%	5,997	90.07%	10,085	89.35%
Overseas	390	3.24%	661	9.93%	1,203	10.65%
Revenue from Operations	12,029	100.00%	6,658	100.00%	11,288	100.00%

Source: RHP

Competitive Landscape
Anlon Healthcare operates in a highly competitive pharmaceutical intermediates industry. It faces high competition from many international as well as local players.

Strengths

• Robust Product Portfolio: Over 65 commercialized products catering to multiple therapeutic areas. Products meet international quality standards, enabling the company to compete globally.
• Experienced Management Team: Leadership with extensive industry and management experience. Capable of strategic decision-making, anticipating market trends, and steering growth.
• Strong Regulatory Compliance: Manufacturing facility approved by GMP, GMP-WHO, and ISO 9001:2015 standards. Facility audited and approved by 33 customers and regulatory authorities.
• Scalable Manufacturing Capabilities: State-of-the-art facility with 400 MTPA installed capacity, capable of supporting current operations and future expansion.

Weaknesses

• Dependence on Key Customers: Revenue is concentrated among a limited number of clients. Loss of any major customer could significantly affect financial performance.

• High Operating Costs: Production and regulatory compliance costs are substantial, which may impact profit margins during periods of pricing pressure.
• Supplier Dependence: Reliance on a few critical suppliers for raw materials can pose supply chain risks.
• Regulatory Barriers: The pharmaceutical industry is highly regulated, requiring lengthy approval cycles for new products, limiting operational flexibility.

Financial Profile

Significant Revenue drop in FY24: While the company has shown revenue growth over a 2-year period, its FY24 revenue witnessed a significant drop. This was due to non-operation of its manufacturing facility for a few months to prepare for compliance with Brazilian regulatory standards.

Stable margins over a 2-year period. Over the past 2 years, its EBTIDA margins have remained stable at 23.2% to 23.3%. However, they had dropped significantly in FY24 due to the closure of its manufacturing facility for a few months.

Table: Peer Comparison – Valuations

Companies	CMP	EPS (INR)	PE Ratio	RONW (%)
Anlon Healthcare limited	91*	6.37	14.3	25.51
Listed peers Kronox Lab Sciences Limited	180.9	6.91	26.18	28.26
AMI Organics Limited	1158.35	19.91	58.18	12.61
Supriya Lifescience Limited	683.35	23.35	29.27	188.57

Source: RHP; * – Upper End of Price Band

Table: Peer Comparison – KPI

	Years	FY’22	FY’23	FY’24	CAGR
Anlon Healthcare Limited	Revenue from Operations	5714.27	11287.74	6658.37	7.95%
	Current Ratio	2	1.97	2.01
	Debt Equity Ratio	38.81	9	3.55
	Debt Service Coverage Ratio	0.56	1.46	1.49
	EBDITA Margin	23.25	18.51	23.35
	Profit after tax	-10.77	582	965.71
	Net profit Ratio	-0.19	5.16	14.5
	Return on Equity	-6.29	130.37	67.99
	Return on Capital Employed	9.38	17.16	16.29
	Fixed Asset Turnover Ratio	2.22	4.14	2.89
Supriya Lifesciences Limited	Revenue from Operations	53004.9	46093.8	57037	3.73%
	Current Ratio	4.99	4.85	5.17
	Debt Equity Ratio	0.04	0.03	0.01
	EBDITA Margin	41.21	29.42	31.6
	Profit after tax	15181	8985.7	11911.4	-11.42%
	Net profit Ratio	28	19	20.5
	Return on Equity	33.29	13	15
Kronox Lab Sciences Limited	Revenue from Operations	8224.75	9557.79	8986.24	4.53%
	Current Ratio	3.23	3.89	6.07
	Debt Equity Ratio	0.4	0.15	0
	Debt Service Coverage Ratio	19.47	192.86	N.A.
	EBDITA Margin	24.93	24.24	32.7
	Profit after tax	1361.06	1640.32	2135.13	25.25%
	Net profit Ratio	0.16	0.17	0.24
	Return on Equity	0.33	0.26	0.65
	Return on Capital Employed	0.47	0.43	0.42
	Fixed Asset Turnover Ratio	9.3	6.01	3.4
AMI Organics Limited	Revenue from Operations	52013.5	61673.4	68758.29	14.98%
	Current Ratio	3.3	2.87	1.76
	Debt Equity Ratio	0	0.01	0.3
	Debt Service Coverage Ratio	0.63	316.17	2.47
	EBDITA Margin	20.64	20.59	12.79
	Profit after tax	7194.61	11222.47	4368.49	-22.08%
	Net profit Ratio	13.83	13.51	6.34
	Return on Equity	21.1	0.15	0.07
	Return on Capital Employed	0.19	19.21	9.34

Source: RHP